The Industry Standard - Overstock.com CEO: "I'm not vindictive" - Comments

The SEC's actions were

James Brownfield — Tue, 23 Sep 2008 14:54:12 -0700

The SEC's actions were extremely short-sighted and will create more problems than they solve... like wrecking a US dollar that had been in a decent recovery mode before someone swatted Cox with the Stupid Stick.

Banning naked short selling will not fix the fundamental problems faced by our banking and finance industries, just like the ban can't turn Overstock into a well-run, profitable online retailer. People who can't pay their mortgages and service their other debts aren't going to magically start making their payments now that the SEC has drunk Patty's Kool-Aid.

Well, well, well... Is naked

solomon740 — Fri, 19 Sep 2008 17:25:50 -0700

Well, well, well...

Is naked short selling still a "scam"?

Is that why the SEC banned it completely (until CBOE made them cave on market makers)?

It's the real thing folks. Too bad Ian didn't get a nice big story out a month before naked short selling was banned.

Ah, the one that got away!

Patch, Counterfeiting has

James Brownfield — Thu, 21 Aug 2008 10:48:31 -0700

Patch,

Counterfeiting has nothing at all to do with the value of the US dollar. The driving forces behind the value of the dollar, in the global arena, are the state of monetary policy as pursued by the Fed and our country's prospects for ongoing economic growth.

"Counterfeited cash" does not show up in the M1 or the M2 figures.

Furthermore, it is yet another tactic of you scammers to equate "naked short selling" with "counterfeiting". These two issues could not be further apart. When a party counterfeits a stock certificate, they fully expect to be able to unload the shares represented by that counterfeited certificate and then walk away. A "naked short seller", on the other hand, recognizes that he/she retains a contingent liability for the market value of those shares for as long as their naked short position remains open.

The securities industry has a mechanism in place to deal with counterfeit securities. See http://www.secic.com to learn more.

Buchanagan, As I've

James Brownfield — Thu, 21 Aug 2008 10:42:22 -0700

Buchanagan,

As I've mentioned previously, Byrne is unique in bringing the "naked short seller" scam into the mainstream with Overstock. Until now, this scam had largely been confined to the pinksheets and the OTCBB where investors tend to be pretty gullible and stock scams run rampant.

Overstock is the only NYSE, AMEX, or NMS/Nasdaq-listed security where the CEO has a long history of using this scam in an attempt to distract attention away from his company's pitiful financial performance and his own ineptitude as a manager. (CEl-SCI just tried their hand at this scam recently, but they'll be laughed out of the room soon enough.) Most journalists don't waste much time looking at pinkies or most of the trash that trades on the OTCBB as it's generally accepted that both venues are rat's nests. So, no, I don't find it unusual at all that a lot of people have latched onto this story. For what it's worth, I don't always find myself in agreement with Antar and his interpretation of Overstock's financials. Unlike Antar, I'm usually willing to accept the material provided by Overstock in their 10-Q's and their 10-K's at face value. However, their past inventory issues aside (where Antar and I were in disagreement), the statement Byrne made about their EBITDA were clearly false. Why did the SEC permit that to slide? Again, I have no idea. It does not change the fact that he lied... or are you another one of these goofballs who doesn't know what EBITDA means?

As for my own reporting requirements regarding short and/or put positions, the only people to whom I have a fudiciary responsibility to provide that kind of information is my investors. And they're the only people who are entitled to that information.

Mr. Brownfield, I am not

Buchanagan666 — Thu, 21 Aug 2008 03:50:58 -0700

Mr. Brownfield, I am not sure what the correlation is between Private Trading Systems Inc, and anything we are discussing. You claim some other lunatic, running Private trading Systems Inc, was involved with USXP, WHO CARES? Stay on topic. No one gives a rats ass about Private Trading Systems Inc.
I am reading all this nonsense from Sam Antar re his accounting genius, yet the SEC exonerates OSTK on any and all issues? HELLO

It is continually "INSANE" to listen to this raving maniac rant about specific accounting irregularities.
Additionally, as stated in a prior post, what were the reasons Sam backed Minkin in the Usana nonsense? Whose money is he really spending for this investment? His or the shorts?
I have been on the street for a long time, and witnessed the best of the best. He dosen't come close.
So, lets stop all the BS and get down to the information everyone is interested in obtaining.

Why the continued attack between Antar, Weiss, Coenen, Bissonnette, etc. Why so concentrated?
What is the motive behind their infatuation with OSTK? An imbicil can read through this routine.
Don't you Mr. Brownfield, find this somewhat unusual? Are you part of this scam? What do your 13 HF's look like. Why don't you be the first investment "PRO" to start putting your puts and short positions on the filings? Be a leader, an innovator?

"As has been pointed out

Dave — Wed, 20 Aug 2008 16:20:22 -0700

"As has been pointed out already, "naked short selling" plays no role in the change of a corporation's share structure. When I naked short a stock, the company's share structure is exactly the same afterwards as it was prior to my taking that position. Is a trip through Overstock's financials necessary to show you how their share structure has changed over the years?"

And counterfeit money does not alter the number of monies issued by the treasury but it does de-value the dollar when such counterfeiting becomes significant. You must learn to understand the basic dynamics of supply and demand Mr. Fund Manager. Tell us, what fund do you work for so that full disclosure to those formulating opinion can be made.

I don´t work neither for Mr

EKL — Wed, 20 Aug 2008 08:05:46 -0700

I don´t work neither for Mr Byrne, neither for Mr. Weiss... so if you want to hire me, just send me a mail, and I will get back to you... In case if it´s Mr. Byrne, I will continue to defend the justice in american trade markets... if it´s someone else, I will shut up... so start sending me money! I'm not kidding! I can be on your payroll! Really!

The timing of this couldn't

James Brownfield — Tue, 19 Aug 2008 15:59:58 -0700

The timing of this couldn't be better:

http://www.sec.gov/Archives/edgar/data/1130713/000110465908053868/000110...

Fire up the tree-shredder, boys.

Harvey, You think you're

James Brownfield — Tue, 19 Aug 2008 10:52:54 -0700

Harvey,

You think you're going to find "victims" on the Reg SHO list?

Fine. First one from the first file: DAI - Daimler AG

You really want us to believe that Daimler AG is a victim of "naked short selling"? You think their market cap of $57 billion is somehow artificially depressed? Even though oil has eased, and I expect its price to decline further, the automakers are still looking at the toughest sales environment they've seen since 1991.

Daimler wisely dumped Chrysler, but their sales will continue to come under pressure for the rest of 2008 and probably the first half of 2009. Had they not cleaned up their balance sheet by ditching Chrysler, it's difficult to imagine where their stock might trade now. But with net tangibles of less than $50 billion and the auto industry, globally, facing some tough head-winds, Daimler is hardly a victim of "naked short selling".

http://www.sec.gov/foia/fails

harveydawabbitt — Tue, 19 Aug 2008 07:19:42 -0700

http://www.sec.gov/foia/failsreports/cnsp_sec_fails_2008q1.zip

take yer pick james

Buchanagan, Private Trading

James Brownfield — Tue, 19 Aug 2008 04:11:32 -0700

Buchanagan,

Private Trading Systems, Inc., is an old, reverse-merged dung-heap that trades on the pinksheets under the symbol "PVTM". Their CEO is a colorful character who's been active in the "naked short seller" scam over the past several years, most famously as a "consultant" to Universal Express.

What is Private Trading

Buchanagan666 — Mon, 18 Aug 2008 21:01:48 -0700

What is Private Trading Systems, Inc?

"Dr." DeCosta, A company's

James Brownfield — Mon, 18 Aug 2008 17:17:16 -0700

"Dr." DeCosta,

A company's "share structure" has a very explicit meaning. While I can understand your desire to twist and distort that meaning to advance the "naked short seller" scam, it doesn't change the fact that a company's "share structure" never changes when "naked short selling" takes place. It ONLY changes when management elects to change the share structure of the company. Furthermore there is a plethora of evidence that supports my contention that, in addition to using the "naked short seller" scam to divert attention away from managerial ineptitude and/or misconduct, these managements are pounding the daylights out of their shareholders with endless secondaries.

The cycle with some of them is extremely vicious: Raise capital, waste away the capital on obscene levels of SGA expenditures, divert blame with the "naked short sellers" scam, then raise more capital. Over and over.

Patch's favorite penny-stock racket, Jag Media, is an excellent example of this. So are other "naked short seller" darlings like Eagletech and Global Links. Any time you dig out the financials of the companies whose managers or promoters cry about "naked short sellers", with no exception I've seen yet, this same cycle appears every time.

That's why I press people like you and Patch to cite an example of a company that's been harmed by "naked short sellers". Some day, maybe, one of your ilk will identify a company whose shares really have been artificially depressed by "naked short selling".

And when you do, I'll start buying heavily.

But until then, don't B.S. me with your misunderstanding of how a company's share structure gets shaped and who's responsible for shaping it.

James B., if I changed the

dr. d — Mon, 18 Aug 2008 16:12:32 -0700

James B., if I changed the term "share structure" to "the number of readily sellable legitimate shares of a corporation backed by a paper certificate plus the number of readily sellable securities entitlements of a corporation as evidenced on the brokerage statements of all investors in that company that bought shares that were never delivered" would you concede that this latter entity is the key variable that interacts with the "demand" variable to determine share price? Don't get hung up on the semantics of "share structure" because neither the number of "authorized shares" nor the number of "outstanding shares" nor the number of "issued shares" changes with naked short selling. What are being sold to unsuspecting American investors in abusive NSS are not "shares" or "units of equity ownership of a corporation". What is being sold doesn't exist. Being that they are technically an "evidence of indebtedness" then they do qualify as being a "security". Note that on a monthly brokerage statement you don't see the term "shares owned"; instead you see the term "securities held long". In dealing with the legal issues of "fraud" and "market manipulation" the "share structure" technically not being changed has nothing to do with the legal concepts of "fraud" and "market manipulation". The "fraud" involves intentional deceit leading to damages. The "market manipulation" aspect has to do with altering the natural "supply" and "demand" of that which interacts to create "price discovery". Since the "securities entitlements" resulting from FTDs and which are also referred to as "placeholder securities" are readily sellable as allowed by UCC Article 8 (due to their theoretically ultra-short term lifespan of a day or two) then they as well as electronic book entries backed by paper-certificated shares are the prime determinants of the "supply" of securities that interact with the "demand" for securities which determine share price. Don't be confused because the "supply" of "shares" isn't altered. Perhaps the term used by the financial press as these being "phantom shares" is not technically accurate as these aren't "shares". Maybe the concept of these being electronic book entries without a paper certificate in existence to justify its existence makes more sense. With the semantics aside doesn't the concept of selling something, refusing to deliver to the purchaser that which you sold and yet gaining access to his funds seem a bit inappropriate regardless of what you "technically" refer to it as?

"Dr." DeCosta, I see that

James Brownfield — Mon, 18 Aug 2008 14:23:50 -0700

"Dr." DeCosta,

I see that you, too, are reluctant to identify a company that's actually been harmed by "naked short selling". Of course, no such company exists, but it would've been a fun exercise nonetheless if you'd have been silly enough to name one.

As has been pointed out already, "naked short selling" plays no role in the change of a corporation's share structure. When I naked short a stock, the company's share structure is exactly the same afterwards as it was prior to my taking that position. Is a trip through Overstock's financials necessary to show you how their share structure has changed over the years?

Only management can alter a company's share structure. And if management elects to throw their shareholders into a tree shredder, as many of these hideous companies tend to do repeatedly, then that's hardly the fault of an astute investor who has the foresight to naked short the stock.

Overstock.com CEO: "I'm not vindictive"

Ian Lamont — Mon, 04 Aug 2008 11:43:26 -0700

Patrick M. Byrne, the colorful CEO of Overstock.com, is in the midst of a Wall Street "Crusade" targeting practices and policies that he claims have undermined the U.S. financial system. In an essay published yesterday entitled "A Message of Peace to Wall Street," he describes a potential financial crisis involving a complex mix of unsettled trades, Contracts For Difference, and the Continuous Net Settlement system.

Byrne goes on to admit that no one has a birds-eye view of the situation, yet that doesn't stop him from estimating it's a $30–$120 billion problem. Seldom one to mince words, Byrne draws a comparison to mismanagement at a poorly designed and managed nuclear reactor:

So respectfully, Wall Street, I believe you are Oak Ridge, Tennessee, blithely going about your jobs at the factory, taking for granted "the piping" that is our settlement system. I believe you have manufactured, and are sitting squarely on top of, a financial atomic bomb. That's not good for you, of course, and if it goes critical, America is downwind.

Byrnes concludes by saying that he doesn't want anyone to get hurt. "I'm not vindictive," he says.

So, does this mean all of the earlier vitriol directed against the hedge funds that allegedly shorted Overstock.com earlier in the decade is water under the bridge?

Not quite. Byrne's "Message of Peace" is part of Deep Capture, a "work of investigative journalism examining the growing threat to our financial system posed by illegal naked short selling." Reading through the posts, it's clear that hedge funds are in the center of Deep Capture's crosshairs. The blog also takes aim at their supposed allies and fronts, including CNBC, suspicious Wikipedia editors, and people who are allegedly manipulating investor opinion through Yahoo Finance message boards.

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